This copy is for your personal non-commercial use only. To order presentation-ready copies of Toronto Star content for distribution to colleagues, clients or customers, or inquire about permissions/licensing, please go to: www.TorontoStarReprints.com

Marriott International Inc. is set to assume management of 38 Canadian Delta hotels and the company’s brand after it signed a $168 million agreement with British Columbia Investment Management Corp. Tuesday.

Marriott, a Maryland-based hospitality business, already has 4,100 properties in 79 countries, including 86 Canadian locations. It reported revenues of nearly $13 billion (U.S.) in 2013.

The deal, which has been in the works for a few months, will make Marriott the largest full-service hotelier in Canada, said the company’s executive vice president of mergers and acquisitions Rick Hoffman.

But before that can happen, Hoffman said Marriott must undergo a review and regulatory process they are hoping to complete by the second quarter of 2015.

Hoffman said the company does not anticipate changing any Delta hotels into Marriott locations, but will extend its Marriott rewards platform to Delta properties.

Article Continued Below

As for the employees, Hoffman said, “we can’t run the hotels without the employees so we expect the vast majority, and essentially all the employees, to remain employed at the hotels.”

This was a good time for British Columbia Investment Management Corporation to sell Delta, which they acquired in 2007, because “the market is looking up” and “evaluations are favourable,” said Ryerson University business professor Gabor Forgacs.

“Whatever you bought in the recession years at good, depressed prices can be sold with a favourable, good financial outcome,” he said, noting that the hotel industry is currently experiencing steady demand. “It’s probably not a bad time to sell.”

He said the move is a bid for Marriott to delve into a country where it doesn’t have a lot of presence.

Delta, said Forgacs, is a natural fit because both hotel chains market themselves at the high-end of mid-scale hotel chains, but at the low-end of the upscale market.

For those concerned about another American company buying out a Canadian one, University of Toronto business professor Laurence Booth said, “We have seen a significant hollowing out of Canadian industry, but hotel chains have no strategic value in terms of importance to Canada, where something like potash arguably does.”

Forgacs agreed.

“Whatever flag they are flying, they are Canadian properties. It’s a Canadian hotel and land so there is no way to tow them away,” he said. “They are still in our country so I am not sure it will be any danger to Canadians.”

If anything, he said the deal shows how much Delta has grown from its humble beginnings in 1962 as a company with a 62-room motel in Richmond, B.C. It quickly expanded across the country before being sold to British Columbia Investment Management Corporation in 2007.

“This is just justifying how good Delta is because an American powerhouse like Marriott sees them as good enough to acquire,” Forgacs said.

Delivered dailyThe Morning Headlines Newsletter

The Toronto Star and thestar.com, each property of Toronto Star Newspapers Limited, One Yonge Street, 4th Floor, Toronto, ON, M5E 1E6. You can unsubscribe at any time. Please contact us or see our privacy policy for more information.

More from the Toronto Star & Partners

LOADING

Copyright owned or licensed by Toronto Star Newspapers Limited. All rights reserved. Republication or distribution of this content is expressly prohibited without the prior written consent of Toronto Star Newspapers Limited and/or its licensors. To order copies of Toronto Star articles, please go to: www.TorontoStarReprints.com